Small investors seeking exposure to Bitcoin through public companies like Metaplanet and Michael Saylor’s strategy firm lost about $17 billion, according to a new report from 10x Research.
Key points:
- Small investors lost approximately $17 billion seeking exposure to Bitcoin through these companies.
- Analysts said investors overpaid about $20 billion because companies sold their shares at prices well above the value of their actual Bitcoin holdings.
- The report expects the market to shift towards Bitcoin asset managers who follow a disciplined, arbitrage-based approach to generating returns.
The company explained that these losses were the result of stock bonuses that exaggeratedly increased the value of these companies compared to actual Bitcoin reserves, the bonuses of which have now disappeared.
“The era of financial magic for Bitcoin treasuries is about to end,” analysts at 10x Research wrote in a report titled “After the Magic: How Bitcoin Treasury Companies Must Evolve to Move Beyond NAV Illusions.”
Small investors paid $20 billion more for exposure to Bitcoin, according to a report from 10x Research.
Small investors “overpaid nearly $20 billion for their exposure to Bitcoin,” the report said, while companies quietly converted rising stock prices into Bitcoin on their balance sheets.
The study compares the strategy of digital asset treasury (DAT) companies to what it describes as “financial magic,” where stocks are repeatedly sold at inflated prices to buy more Bitcoin. As a result, Metaplanet’s market capitalization grew from a base of $1 billion in Bitcoin to $8 billion at its peak before falling to $3.1 billion, although it still held $3.3 billion in Bitcoin.
The report states that in the process, shareholders “lost $4.9 billion in company value, while the company was able to raise $2.3 billion in Bitcoin.”
Strategy (MSTR) has followed a similar pattern, with the company’s shares previously trading at multiples ranging from 3 to 7 times the value of its actual Bitcoin holdings. Today it trades at around 1.4 times net asset value (NAV), erasing much of the speculative premium (i.e. irrational price increases) that characterized the previous cycle.
After the Magic: How Bitcoin Cash Companies Must Evolve Beyond NAV Illusions
Why this report is important
The era of financial wizardry is coming to an end for Bitcoin treasure companies.
They conjured up billions in paper wealth by issuing shares way above their actual Bitcoin value, until the… pic.twitter.com/mS34Wqhzmm– 10x Research (@10x_Research) October 17, 2025
According to 10x Research, this normalization of net asset value (NAV) could mark a turning point for the sector. Companies whose shares are currently trading at or below the value of their Bitcoin holdings can be considered to represent “pure exposure to the currency with the potential for future trading profits.”
Analysts confirm that companies able to adapt and move from fashionable treasury to asset management models based on arbitrage strategies can achieve annual returns of between 15% and 20%. The report also states: “The magic era is over, but the correction will create a new generation of Bitcoin asset managers. As the market matures, firms with a strong capital base and experienced trading teams will determine what the next bull market will be.”
Novogratz: The digital cash boom has reached its peak and the focus is now on what’s left
Michael Novogratz, CEO of Galaxy Digital, said the wave of new digital asset treasury companies has reached its peak and attention is now turning to existing companies that can scale and dominate. “It appears that we have passed the peak of corporate Treasury issuance,” Novogratz explained during Galaxy’s second-quarter earnings report, indicating that the market would enter a more competitive phase in the future.
It is worth noting that this rise in digital asset treasury companies is due to favorable US regulations, after companies such as Strategy, GameStop, Trump Media and SharpLink allocated their reserves to invest in Bitcoin, Ethereum-ETH and other digital assets.
However, Novogratz warned that saturation could make it difficult for new investors to get in, especially as Ethereum-focused treasuries such as BitMine and SharpLink continue to expand.
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